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www.emeraldinsight.com/0265-671X.htm
Antecedents of
The antecedents of relationship relationship
quality in Malaysia and quality
New Zealand
233
Nelson Oly Ndubisi
Nottingham University Business School, Nottingham University, Received January 2007
Selangor, Malaysia Revised March 2008
Accepted March 2008
Catheryn Khoo-Lattimore
Taylor’s University, Lakeside Campus, Malaysia
Lin Yang
School of Marketing and International Business,
Victoria University of Wellington, Wellington, New Zealand, and
Celine Marie Capel
The University of Nottingham Malaysia Campus,
Selangor, Malaysia
Abstract
Purpose – The purpose of this paper is to examine the relationship between the relational dynamics,
namely trust, personalisation, communication, conflict handling and empathy, and relationship
quality in the banking industry of two culturally dissimilar nations – Malaysia and New Zealand.
Design/methodology/approach – Bank customers in Kuala Lumpur, Malaysia and Dunedin, New
Zealand were surveyed using a questionnaire. Bank intercept technique was used in administering the
instrument. A total of 358 customers (comprising 150 from Malaysia and 208 from New Zealand)
provided the data for the study. Multiple regression analysis was used to estimate the hypothesized
relationships.
Findings – The results of the study show that the five relational dynamics explain 84 percent and 76
percent of variations in relationship quality in Malaysia and New Zealand respectively.
Communication, trust, and empathy are significantly related with relationship quality in both
countries, whereas personalisation has a significant impact on relationship quality in New Zealand but
not in Malaysia. The results also reveal that conflict handling is significantly and marginally
associated with relationship quality in New Zealand and Malaysia respectively.
Research limitations/implications – Although the study was conducted on the banking industry,
the outcome may be relevant to other service sectors. Further, understanding relational dynamics in
different cultures is important, as the study has shown; thus integrating culture in the relationship
marketing/management models would advance the understanding of culture roles in consumers’
perceptions of and influences on relationship quality.
Originality/value – The paper assesses and compares the impact of relational dynamics on
relationship quality among bank customers from two different cultures. By comparing opposite
cultures this study is an advance over past single country studies, and enhances the prospect of
International Journal of Quality &
generalizing the findings. Reliability Management
Keywords Culture (sociology), Banking, Malaysia, New Zealand Vol. 28 No. 2, 2011
pp. 233-248
Paper type Research paper q Emerald Group Publishing Limited
0265-671X
DOI 10.1108/02656711111101773

2. IJQRM Introduction
28,2 Relationship marketing (RM) has been defined as “the process of identifying and
establishing, maintaining, enhancing, and when necessary terminating relationships
with customers and other stakeholders, at a profit, so that the objectives of all parties
involved are met, where this is done by a mutual giving and fulfillment of promises”
¨
(Gronroos, 2000, p. 98). Associated to the subject of relationship marketing is the
234 quality of the relationship. Jarvelin and Lehtinen (1996) refer to relationship quality
(RQ) as a customer’s perception of how well the whole relationship fulfils his or her
expectations, predictions, goals and desires. Hence, RQ is a bundle of intangible value,
which augments products or services and results in an expected interchange between
buyers and sellers (Levitt, 1986). The more general concept of RQ points to the overall
impression that a customer has when a service delivery occurs (Ndubisi, 2006, 2007;
Wong and Sohal, 2002), which is an important prerequisite to a successful long-term
relationship.
The benefits of RM and RQ for organizations have already been researched
(Alexander and Pollard, 2000; Colgate and Stewart, 1997; Goff et al., 1997). In
particular, an examination of the literature reveals that there is a significant amount of
study on the advantages of relationship marketing exclusively within the banking
industry (Colgate and Hedge, 2001; Lees et al., 2007; Lewis and Soureli, 2006; Ndubisi,
2007). This is not surprising given that the banking sector has been experiencing
increasing competitive activity with flotation, mergers and new market entrants
(Bellou and Andronikidis, 2008). In addition, the intangibility of the offerings in the
banking industry highlights the importance of customer relationships (Dibb and
Meadows, 2001), which has been linked to customer loyalty (Ndubisi et al. 2007), and in
turn to profitability (Trubik and Smith 2000). Trubik and Smith (2000) and Garland
(2002) found strong, direct relationship between customer loyalty and customer
profitability in the banking industry. Thus, generally, it pays for organizations to
maintain quality relationship with customers. However, given the significant sacrifice
and investment required to build quality relationship with customers, the possibility of
different drivers of relationship quality existing in different markets, and the potential
for differential market responses to relationship building efforts/strategies of firms, it
is not possible to generalize on the antecedents and consequences of relationship
quality without undertaking a cross-cultural study. Thus, the objective of this research
is to examine whether national culture plays a role in the association of the relational
dynamics on customer perceived relationship quality. Although various dimensions
have been used to reflect culture, the cultural clustering has typically been defined by
national and geopolitical boundaries hence in this research, we chose respondents from
Malaysia and New Zealand as the comparative study groups because they exhibit
significant cultural differences.
The rest of the paper is organized as follows: the next two sections reviews extant
literature on relationship quality, relational dynamics or the relationship marketing
dimensions, the concept of national culture and the dimensions of culture, and also
shows the link between culture and the relational dynamics and relationship quality.
This section also holds the study’s hypotheses. The next section shows the
methodology of the research including data collection and analysis procedures. This is
followed by the discussion of the findings and the study’s limitations and future

3. research direction. Finally, the implications of the research are presented and some Antecedents of
conclusions drawn from the outcomes. relationship
The underpinnings of relationship quality
quality
Researchers (e.g. Gummesson, 1987; Hennig-Thurau et al., 2002; Wong and Sohal, 2002)
have documented various relational dynamics. More specifically, these dimensions
have been identified as empathy (Ndubisi, 2004; Yau et al., 2000), trust (Morgan and 235
Hunt, 1994; Wong and Sohal, 2002; Selnes, 1998), communication (Sharma and
Patterson, 1999; Palmatier et al., 2006), conflict handling (Dyer and Song, 1997; Song
et al., 2000) and personalization (Berry, 1995; Gordon et al., 1998). In this study we aver
that the relational dynamics namely empathy, trust, communication, conflict handling
and personalization will have influence on relationship quality in Malaysia and New
Zealand. We also aver that the robustness of these relationships will differ between the
two countries based on their cultural differences. This line of argument is represented
in the schema (Figure 1).
Empathy is defined as the ability to understand someone else’s desires and goals
(Yau et al., 2000). Empathy reduces reliance on legal governance because exchange
partners who are governed by the principle of empathy tend to treat others in the
manner they would like to be treated (Ndubisi, 2004). Empathy is linked at a cultural
level to the ability of an individual to see situations from another’s perspective, though
not necessarily agreeing with such a perspective. One way to develop a unique
relationship is to develop empathy.
Communication means providing information that is timely and can be trusted-
including information if delivery problem occurs; information on quality assurance;
procedural information to customers and opportunity for customer feedback, etc.
Palmatier et al. (2006) posit that communication enhances relationship quality and
builds stronger relationship. This is supported by another study which found that
intensive communication occurs in close relationships (Holden and O’Toole, 2004).
Although it has been found that communication style can differ widely between
Figure 1.
The schema of the
research relationships

4. IJQRM receiver-focused amongst Asians or sender-centered between Westerners (Yum, 1988),
28,2 communication has been identified as one of the conditions that must be fulfilled by the
exchange partners for any relationship exchange (regardless of culture) to occur
(Kotler, 1988).
Trust is defined as a willingness to rely on an exchange partner in whom one has
confidence (Moorman et al., 1993). Schurr and Ozanne (1985) defined the term as the
236 belief that a partner’s word or promise is reliable and a party will fulfil his/her
obligations in the relationship. Generally, the strength and quality of a relationship rely
on the level of trust – the higher the trust level, the stronger the relationship will be.
Loyalty and trust for exchange partners in a relationship is an obligation and rendered
without anticipation of reciprocity (Yau et al., 2000). Disregarding this obligation can
seriously damage one’s reputation and lead to many disadvantages. Indeed, one would
expect a positive outcome from a partner on whose integrity one can rely on
confidently (Morgan and Hunt, 1994).
Conflict handling refers to the supplier’s ability to avoid potential conflicts and
solve manifest conflicts before they create problems (Dwyer et al., 1987). It also points
to the ability to discuss the arisen problems and their solutions openly. Ndubisi (2007)
categorized conflict handling into preemptive (which strive to forestall sources of
conflicts) and reactive CH which tries to solve manifest problems and make service
recoveries. While service recoveries positively affect the relationship-quality (e.g.,
Mattila and Patterson, 2004), there are other important areas which have been largely
´
ignored – the ways service firms can avoid service failures (e.g., Vazquez-Casielles
et al., 2007) through preemptive conflict handling. Conflicts generally result from
perceived inequity (Adams, 1963), therefore preempting the sources of inequity and
forestalling it will increase perceived relationship quality.
Personalization is concerned with the degree to which the supplier can tailor the
relationship to the customers. Studies have shown that personalization is one of the
most successful relationship-building initiatives used by firms and is a significant
dimension impacting on RQ (Bettencourt and Gwinner, 1996; Claycomb and Martin,
2001). To our knowledge, there has been no academic literature investigating the role of
culture in impacting personalization on relationship quality.
Profiles of Malaysia and New Zealand
According to the latest census held in 2000, the total population of Malaysia was 23.27
million people (APCD, 2008) but today it is estimated to be 25 million. According to
APCD, 65.1 percent were Bumiputera (Malays), while Chinese and Indians comprised
26.0 percent and 7.7 percent respectively. Sarawak’s predominate ethnic group
comprised 30.1 percent Ibans while Chinese and Malays comprised 26.7 percent and
23.0 percent respectively; Sabah is predominately comprised of the ethnic group
Kadazan Dusun (18.4 percent) followed by the Bajas and Malay groups of 17.3 percent
and 15.3 percent respectively (APCD, 2008). While the official language is Bahasa
Malaysia, English language is widely spoken.
New Zealand has a population of slightly less than four million people with most
living in the key cities (Taylor, 2007). According to Taylor, the large majority of the
population (89 percent) has a European heritage, primarily English. Therefore, English
is the predominant language and Christianity the largest religion. The Maori, a
Polynesian people who were the earliest inhabitants of New Zealand make up the

5. remaining population. Though Maori and Europeans freely intermarry and have Antecedents of
similar ways of life, each maintains its identity, so social and cultural aspects remain relationship
distinct for each group. The standard of living is high, and their literacy rate is 100
percent. quality
The role of culture
National culture has been defined as patterns of thinking, feeling and acting that are 237
rooted in common values and societal conventions (Nakata and Sivakumar, 2001).
While culture is widely studied in the organizational literature, only recently have
quality and relationship researchers began to examine culture in these domains.
Hofstede (1980), Hofstede (2001) and Hofstede and Bond (1988) suggested that the
cultures of different nations can be compared in terms of five dimensions. They are
individualism-collectivism, power distance, uncertainty avoidance, masculinity-
femininity, and long term orientation. Table I shows the definition of culture and
the scores of Malaysia and New Zealand on each of the dimensions.
In the following section, we present competing theoretical arguments in each case.
For instance, in the case of individualism-collectivism, we first make the case about
how trust, empathy, communication and conflict handling will be more important in a
collectivistic culture like Malaysia and how personalization will be more important in
individualistic NZ in building relationship quality. We also make the contrasting case
about how personalization will be more important in high power distance culture like
Malaysia as this will help to further clearly mark class differences.
The individualism versus collectivism dimension points to the relationship between
an individual and other members of a society. Individualism refers to a loose social
framework where members look after themselves and their immediate families. On the
other hand, a collectivist society indicates a preference for a tight knitted social
Malaysia NZ
Dimension Definition (based on Hofstede, 1980) score score
Individualism- A loosely (v. tightly) knit social framework in 26 79
collectivisma which people are supposed to take care of
themselves and immediate families only v.
people feel absolute loyalty to their in-group and
expect the in-group to look after them
Power distance The extent to which a society accepts the fact 104 22
that power is inequitably distributed
Uncertainty avoidance The extent to which ambiguity and uncertainty 36 49
are threatening and avoided
b
Masculinity-femininity The extent to which assertiveness and success 50 58
are dominant values – the extent to which caring
for others, quality of life, and people are
dominant social values
Long-term orientation The extent to which future-oriented values such –c 30
as persistence and thrift are dominant
Notes: aHigher value indicates greater individualism; bHigher value indicates greater masculinity; Table I.
c
There is no score for Malaysia on LTO dimension; Figures in italics indicate that scores are Cultural dimensions and
remarkably different Malaysia-NZ scores

6. IJQRM framework in which individuals expect their relatives to look after them for
28,2 unquestioning loyalty. In highly collectivistic cultures, the emphasis is on the group,
rather than the individual. People are more likely to value quality relationship and
nurture it. Hence the overall predictive power of the relational dynamics will be greater
in Malaysia compared to New Zealand. Therefore trust, communication, and empathy
will be more important in a collectivistic culture like Malaysia in building quality
238 relationship than in an individualistic culture like NZ. Personalisation will be more
important in an individualistic culture like NZ in building relationship quality as
customers continue to seek for customizations that will further distinguish them from
other members of the society.
The large versus small power distance dimension is the extent to which the
members of the society accept inequality and power in institutions and organisations.
In a large power distance society, people have a propensity to accept unequal
distribution of power without any demand for justification. In a small power distance
society, people demand justification for power inequalities and are not prepared to
accept inequalities willingly. In NZ for example, we expect the relational dynamics to
have influences on relationship quality due to its low power distance. We also expect
conflict handling to be of significant influence as preemptive conflict handling and
open and free discussion of problems is more of a hallmark of low power distance
culture than a high power distance society. Also due to the sophistication of the NZ
market, personalisation is expected to have important influence on relationship quality
compared to less sophisticated Malaysian market.
The strong versus weak uncertainty avoidance dimension considers the degree of
anxiety about uncertainty and ambiguity. Strong uncertainty avoidance specifies
intolerance by members of the society towards uncertainty and ambiguity. In contrast,
weak uncertainty avoidance suggests a more relaxed and tolerant attitude by members
of the society towards the future. The masculinity versus femininity dimension relates
to the division of roles between the sexes in a society. Masculinity stands for a societal
preference for competition, while femininity embodies an inclination to place
relationships with people above money, to help others, to care for the weak and to
preserve the quality of life. Since Malaysia and NZ are relatively close in their scores on
these dimensions, differences in relationship quality and relational dynamics may not
be explained by these dimensions. High long-term orientation cultures place greater
value on persistence over quick results. These cultures also place a greater emphasis
on being thrifty. Individuals are less likely to choose to transact with businesses or
individuals they have no relationship with. Nonetheless, since there is no score for
Malaysia on long-term orientation, we make no speculation based on this dimension.
Extant literature (e.g. Ndubisi, 2004) has speculated that certain determinants of
relationship quality are stronger in some cultures and weaker in others. This
speculation however, has not been tested empirically. Given the dearth of research in
the role of culture on relationship quality, this research attempts to enhance current
understanding in this area. Taken together our critical assumptions are that:
.
personalisation will be more important in building quality relationship in
individualistic cultures (e.g. NZ) as compared to collectivistic ones (e.g. Malaysia);
.
conflict handling will be more important in individualistic and low power
distance NZ compared to collectivistic and high power distance Malaysia
because open and free discussion of problem is not the norm in Malaysia and

7. preemptive conflict handling will be valued more in sophisticated market like NZ Antecedents of
compared to less sophisticated Malaysian market; and relationship
.
trust, communication and empathy will be important in both cultures, albeit their quality
association with relationship quality will be relatively more robust in
collectivistic Malaysia than in individualistic NZ.
Thus, we hypothesized the following: 239
H1. The impact of empathy on relationship quality will be stronger in Malaysia
than in New Zealand.
H2. The impact of communication on relationship quality will be stronger in
Malaysia than in New Zealand.
H3. The impact of trust on relationship quality will be stronger in Malaysia than
in New Zealand.
H4. The impact of conflict handling on relationship quality will be weaker in
Malaysia than in New Zealand.
H5. The impact of personalization on relationship quality will be weaker in
Malaysia than in New Zealand.
Methodology
The population of this study is bank customers in the cities of Kuala Lumpur, Malaysia
and Dunedin, New Zealand. A bank intercept method was used in both countries to
administer the questionnaire. Participation by the respondents was absolutely
voluntary. Out of 500 survey form administered in each location, 150 usable responses
were received in Malaysia and 208 in NZ. This translates to 30 percent and 42 percent
response rates respectively.
The construct measurements were adapted from different sources. Trust items were
adapted from past studies (Churchill and Surprenant, 1982; Ndubisi, 2007);
communication and conflict handling items were adapted from Morgan and Hunt
(1994). Items for empathy were developed based on Ndubisi (2004); personalisation and
relationship quality items were adapted from Churchill and Surprenant (1982), Morgan
and Hunt (1994), and Ndubisi, 2007). These items were measured on a five-point- Likert
scale ranging from ‘strongly disagree’ to ‘strongly agree’. Table I shows the items used
for each construct and their loadings, communalities and reliability estimates based on
Cronbach’s alpha values.
Factor analysis was performed on the items to establish their suitability for the
multivariate analysis. Based on acceptance of factor loadings of above 0.50 (Hair et al.,
1998), the results indicated valid construct measures. Table II shows key factors, items
and loadings, communalities and reliability statistics. Twenty-four items loaded on six
factors out of the original 28. Owing to high cross loading, one item was dropped from
trust (Employees of the bank show respect to customers) and three from empathy (The
bank demonstrates willingness to understand my feelings; the bank demonstrates an
ability to understand my feelings; and benevolence can be used to describe the bank’s
customer service policy). Total variance explained by the factors was 77.30 percent. All
factor loadings were statistically significant at p , 0.05. Thus overall convergent
validity was established.

8. IJQRM
Key dimensions and items Loadings Communalities Cronbach’s alpha
28,2
F1 – Relationship quality (variance ¼ 56.79%) 0.92
RQ1: My relationship with the organization is
desirable 0.63 0.760
RQ2: My relationship with the organization meets
my goals 0.72 0.813
240 RQ3: My relationship with the organization fulfils
my expectations 0.69 0.809
RQ4: Overall, I have a good relationship with the
organization 0.68 0.747
F2 – Personalisation (variance ¼ 5.65%) 0.91
PS1: The organization makes adjustments to suit my
needs 0.77 0.777
PS2: The organization offers personalized services to
meet customers’ needs 0.76 0.800
PS3: The organization is flexible when its services
are changed 0.74 0.774
PS4: The organization is flexible in serving my needs 0.73 0.831
F3 – Empathy (variance ¼ 5.13%) 0.90
EM1: Employees of the organization exercise
goodwill when dealing with customers 0.77 0.773
EM2: Employees of the organization try to put
themselves in the customer’s position 0.79 0.766
EM3: Employees of the organization provide
adequate care and attention to customers 0.71 0.783
EM4: Employees of the organization show
compassion to customers 0.80 .810
F4 – Trust (variance ¼ 3.85%) 0.92
TR1: The organization is very concerned with
security for my transactions/personal information 0.73 0.798
TR2: The organization’s promises are reliable 0.73 0.805
TR3: The organization is consistent in providing
quality service 0.65 0.771
TR4: The organization fulfills its obligations to
customers 0.62 0.791
TR5: I have confidence in the organization’s services 0.62 0.819
F5 – Conflict handling (variance ¼ 3.11%) 0.82
CH1: The organization tries to avoid potential
conflicts 0.75 0.731
CH2: The organization tries to solve manifest
conflicts before they create problems 0.80 0.802
CH3: The organization has the ability to openly
discuss solutions when problems arise 0.60 0.728
F6 – Communication (variance ¼ 2.76%) 0.86
CM1: The organization provides timely and
trustworthy information 0.50 0.723
CM2: The organization provides information when
there is a new service 0.73 0.807
CM3: The organization makes reliable promises 0.50 0.693
CM4: Information provided by the organization is
always accurate 0.50 0.638
Table II.
Factor loadings and Notes: Total variance (%) ¼ 77.30; KMO ¼ 0.965; Approx. Chi Square ¼ 6575.59; df ¼ 276; Sig.
construct reliability ¼ 0.000

9. The scale reliability of each dimension was assessed using Cronbach’s alpha as Antecedents of
suggested by Feldt et al. (1987). Reliability estimates (Cronbach’s Alpha) for the relationship
construct’s dimensions are shown in Table II, i.e. Relationship quality (0.92), Trust
(0.92), Personalisation (0.91), Communication (0.86), Conflict Handling (0.82), and quality
Empathy (0.90), suggesting a high degree of reliability. The results have well exceeded
the 0.60 lower limit of acceptability (Hair et al., 1998). Thus the internal consistency of
the instrument was confirmed. 241
Results and discussion
Table III is the summary of the demographic composition of the respondents. The table
shows that the respondents represent a wide range of the population in terms of age,
gender, race, education, marital status and income in both countries. The number of
male and female respondents was more evenly distributed in New Zealand than in
Malaysia (60.7 percent and 39.3 percent in Malaysia and, 45.2 percent and 50 percent in
New Zealand respectively). This may be because of the conservative nature of
Malaysian women compared to their NZ counterparts. The majority of the respondents
in both Malaysia and NZ were between the ages of 18 and 28, confirming that
“generation Y” were more responsive to survey than any other age group. There were
more respondents with post graduate degrees from NZ than Malaysia, a reflection of
the NZ’s higher literacy rate. There were more divorcees in the NZ sample than in the
collectivistic Malaysia sample. The number of unreported cases or missing values was
Malaysia New Zealand
Profile Description No. % Description No. %
Age 18-28 years 72 48.0 18-28 years 76 36.5
29-42 years 40 26.7 29-42 years 41 19.7
43-60 years 35 23.3 43-60 years 65 31.2
60 years above 1 0.7 60 years above 17 8.2
Not reported 2 1.3 Not reported 9 4.3
Gender Male 91 60.7 Male 94 45.2
Female 59 39.3 Female 104 50.0
Not reported 10 4.8
Highest educational qualification Secondary or below 17 11.3 Secondary or below 80 38.5
High school/diploma 53 35.3 High school/diploma 25 12.0
Degree/professional 75 50.0 Degree/professional 67 32.2
Postgraduate 5 3.3 Postgraduate 25 12.0
Not reported 11 5.3
Marital status Single 89 59.3 Single 103 49.5
Married 59 39.3 Married 73 35.1
Divorced 2 1.3 Divorced 18 8.7
Not reported 14 6.7
Monthly income No income 26 17.3 No income 21 10.1
Below RM2,000 25 16.7 Below NZD2,000 91 43.8
RM2,000-RM3,999 31 20.7 NZD2,000- NZD3,999 47 22.6
RM4,000- RM5,999 32 21.3 NZD4,000- NZD5,999 16 7.7
RM6,000- RM7,999 17 11.3 NZD6,000- NZD7,999 6 2.9
RM8,000- RM9,999 10 6.7 NZD8,000- NZD9,999 8 3.8 Table III.
RM10,000 and above 9 6.0 NZD10,000 and above 5 2.4 Respondents’
Not reported 14 6.7 demographic profile

10. IJQRM more in the NZ data than in the Malaysia data. This may be a consequence of low
28,2 power distance in NZ, which brings about freedom of choice and expression, whereby
the respondents are not daunted to withhold any information they wish not to disclose.
It may also be a reflection of strong individualism, with greater tendency to consider
things as personal, compared to the more open and secret-sharing collectivistic society.
242
Testing for association
The results of the regression analysis in Table IV show that, in Malaysia, trust,
personalisation, communication, conflict handling and empathy contribute
significantly (F ¼ 152:926; p ¼ 0:000) and predict 84 percent of variance in
relationship quality. As for New Zealand, the results of the regression analysis in
Table V show that trust, personalisation, communication, conflict handling and
empathy contribute significantly (F ¼ 110:7916; p ¼ 0:000) to relationship quality,
predicting 76 percent of the variance. In other words, these five relationship marketing
dimensions predict a significant change in relationship quality, albeit the explanatory
power of the relational dynamics is greater in Malaysia than in NZ. The strong
collectivistic culture in Malaysia is a plausible explanation for the differences.
The results in Table IV further show that, in Malaysia, there is a significant
relationship between trust, communication, and empathy and relationship quality at 5
percent significance level. It means that perceived relationship quality depends on the
level of trust (or trustworthiness), empathy and communication ability of the bank. The
positive sign of the beta coefficients shows that the higher the level of trust, empathy
and communication of the bank, the greater the relationship quality perceptions of
customers. Conflict handling has only a marginal relationship with relationship quality
Variables Beta coefficients t-value p-value
Empathy 0.199 3.706 0.000
Communication 0.367 4.796 0.000
Trust 0.343 5.163 0.000
Conflict handling 0.103 1.681 0.095
Personalisation 0.014 0.216 0.829
Table IV. Constant 20.106 20.760 0.448
Regression analysis for
Malaysia Notes: R 2 ¼ 0.842; F ¼ 152.926; Sig. F ¼ 0.000
Variables Beta coefficients t-value p-value
Empathy 0.154 3.153 0.002
Communication 0.362 5.194 0.000
Trust 0.312 5.134 0.000
Conflict handling 0.121 2.121 0.035
Personalisation 0.121 2.349 0.020
Table V. Constant 20.151 20.835 0.405
Regression analysis for
New Zealand Notes: R 2 ¼ 0.759, F ¼ 110.791, Sig. F ¼ 0.000

11. (at 10 percent significance level, whereas personalisation has no significant Antecedents of
relationship with relationship quality even at 90 percent confidence level. relationship
The results for New Zealand in Table V show that there is significant relationship
between all five factors and relationship quality at five percent significance level. This quality
indicates that the higher the level of trust (or trustworthiness), empathy,
personalisation, communication, and conflict handling ability of the bank, the higher
the level of customer perceived relationship quality. 243
Limitations and future research
Although the objectives of this research were met, we identified two limitations in the
course of the study. First, the study focuses specifically on the banking industry. This
emphasis could limit generalisation of the findings to the entire service sector. This
limitation however, presents an opportunity for future research in this area. Future
research should examine different service sectors to reduce possible service type
influences, and to elicit responses from a wide variety of service provider types based
on Bowen’s (1990) three service firm classification. Bowen’s (1990) taxonomy of service
firms includes:
(1) those services directed at people and characterized by high customer contact
individually customized service solutions (e.g. health/medical care);
(2) services directed at an individual’s property, in which moderate to low customer
contact is the norm and the service can be customized only slightly (e.g. retail
banking); and
(3) services typically directed at people that provide standardized service solutions
and have moderate customer contact (e.g. hotel/restaurant service).
By comparing these different sectors, the findings stand a better chance to be
generalized.
Another direction for future research is to include other less common relational
marketing keystones not covered in this study. Some examples include equity,
mutualism, and competence. These were not studied in the present work, which
concentrated on the stronger relationship variables as identified by extant literature.
By adopting a more comprehensive list, a richer understanding of the phenomenon can
be gained.
Implications and conclusions
Several implications of the study are discussed – theoretical, cultural and managerial
implications. As the study shows consumers’ perception of a quality relationship is
culture-bound. Cultural values play a significant role in the association of the relational
dynamics with relationship quality in Malaysia and New Zealand’s banking sectors.
Theoretically, all the culture-based hypotheses proposed in the paper are supported by
empirical evidence. H1 (The impact of empathy on relationship quality in Malaysia will
be stronger than in New Zealand) was supported as shown by the results. The impact of
empathy on RQ in Malaysia with b of 0.199 is stronger than in New Zealand with b of
0.154. Based on the higher beta coefficient for empathy in Malaysia we can conclude that
H1 is supported. Although there is no doubt that bank customers in Malaysia and New

12. IJQRM Zealand perceive empathy as a strong contributor to their perceived RQ with their banks,
28,2 it is a stronger determinant amongst Malaysians in a collectivist society.
H2 (The impact of communication on relationship quality in Malaysia will be
stronger than in New Zealand).was also supported as communication contributes more
to a customer’s perceived RQ in Malaysia (b ¼ 0:367) than it does in New Zealand
(b ¼ 0:362). This has been anticipated as the literature review pointed out that the
244 ability to communicate is a ‘must-have’ condition for any relationship exchange to
occur, however, since societies marked by strong ingroup and tight knit have more
frequent communication and higher tendency for sharing of secrets, communication
has a stronger impact on relationship quality in Malaysia than it does in NZ. Similarly,
trust is an important determinant of relationship quality in both Malaysia and New
Zealand, but more so in collectivistic Malaysia. The results justify the acceptance of H3
(The impact of trust on relationship quality in Malaysia will be stronger than in New
Zealand), based on the beta coefficient for trust which is larger in Malaysia (b ¼ 0:343)
than New Zealand (0.312).
H4 (The impact of conflict handling on relationship quality in Malaysia will be weaker
than in New Zealand) was also supported by empirical evidence. There is significant
relationship found between conflict handling and customer relationship quality in New
Zealand (p-value ¼ 0:035). However, this is not the case in Malaysia as only a marginal
relationship was unveiled at 10 percent significance level. Further explanation could be
derived from the very nature of the Malaysian (or even larger Asian) society as well as the
operationlisation of conflict handling in the study. Conflict handling in the study
emphasizes open discussion of the problem and solution which is actually un-Asian. Most
Malaysians see this kind of open discussion as confrontational, thus they are unlikely to
subscribe to this type of conflict handling strategy. Another key element of conflict
handling in the study is its preemptive rather than reactive approach. Proactive
approaches like this are more likely to be appreciated in more sophisticated markets like
NZ, where as the Malaysian market once described as “yesterday people” by one of the
world’s leading authority in marketing management – Philip Kotler, may still be very
content with reactive approaches such as service restoration. As such, conflict handling is
this study has important implication for relationship quality in NZ but not in Malaysia.
Also collectivists’ focus on harmony and success and their tendency to avoid open
discussion of problems is understandable. As a collectivist society, Malaysians may be
more concerned about how their actions impact groups than are individualists (Hui and
Triandis, 1989), hence open discussion of problems may be shunned. They are also more
willing to sacrifice personal interests for group welfare (Thomas et al., 2003) by not being
confrontational as many of them will see open discussion of problems with the service
provider. Lastly, the high power distance in Malaysia can result in restriction to freedom
of expression (including complaints about service failures and dissatisfaction), thereby
limiting the degree of openness in discussing problems instead a resort to private
complaint behaviours. Malhotra et al. (2008) had documented that Malaysians generally
are more likely to complain privately (to family and friends) about service failures and
dissatisfaction than complain to the service provider as they view the latter approach as
confrontational and against the spirit of harmonious co-existence.
Lastly, H5 (The impact of personalization on relationship quality in Malaysia will
be weaker than in New Zealand) was supported because personalisation showed
significant relationship with customer perceived relationship quality at five percent

13. significance level in New Zealand ( p ¼ 0:02), but it was not a significant determinant Antecedents of
of relationship quality in Malaysian. Two plausible explanations for this outcome are relationship
the strong individualism culture and relatively sophisticated market in NZ. Since
personalisation can help to reinforce individual differences and uniqueness, it is more quality
likely to be effective in building relationship quality in a highly individualistic culture
such as NZ than in a collectivistic culture like Malaysia. Indeed, group approval and
similarity are both well received and acceptable in Malaysia. Moreover, personalisation 245
is a service delivery strategy that is likely to appeal to sophisticated markets who are
constantly demanding for greater value. Less sophisticated markets are more easily
impressed, thus it may not require personalized or customized service to satisfy them
and positively shape their relationship quality perceptions. For sophisticated and
individualistic markets like NZ, personalisation can be both a useful strategy for
delighting customers and a way to show them they are special to the organisation. By
differentiating and customising solutions to their unique needs and tastes, financial
services organisations in this market are also demonstrating a level of competence that
is needed in order to delight such informed and highly demanding market. On the flip
side the collectivist society puts more emphasis on a caring and sharing interaction
with others, it emphasizes the similarities among members of the society more than
their differences, hence, personalisation which stresses differences and uniqueness
turns out to be a weak determinant of relationship quality.
Managerially, banks need to understand what customers in one culture rank as
important attributes to relationship quality, which may differ from those in another. As
the research revealed, offering personalized services and demonstrating high conflict
handling ability were perceived as important determinants of relationship quality by
New Zealand bank customers as individualists, but they are not the case for collectivists
like Malaysians. International banks will need to modify their global marketing
strategies to take into account the impact of cultural differences in the perception of the
determinants of good relationship quality. On the other hand, we also found some
similarities in this study. More specifically, it was found that trust, communication and
empathy contribute significantly to relationship quality no matter what the culture
context is. This implies that when banks offer their services to either collectivism/high
power distance-oriented or individualism/low power distance-oriented customers, they
must gain customers’ trust by consistently fulfilling their promises and offering reliable
and quality service. Banks will also need to communicate effectively by providing
timely, accurate and trustworthy information on new services and any changes in their
services. In addition, banks must show a strong empathy in the bank-customer
relationship by maintaining fairness, creating win-win situations and providing mutual
support. It is also germane to mention that while trust, communication and empathy are
important in the opposite cultures, their impact on relationship quality is more robust in
Malaysia, where they are the only relational dynamics out of the five examined in this
paper with the potency to favourably shape relationship quality perceptions of
consumers of financial services.
In sum, for the banking industry in the international context, it is important to
understand that the cultural values of a given market are critical inputs to the
development of effective relationship marketing strategies. Specifically, culture has a
key role to play in building quality relationships as well as in designing strategies for
enhancing perceived relationship quality.

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Corresponding author
Nelson Oly Ndubisi can be contacted at: olynel@hotmail.com
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